You have just purchased a new warehouse. To finance the purchase, you’ve arranged for a 25-year mortgage for 75 percent of the $3,600,000 purchase price. The monthly payment on this loan will be $17,700.

Question

You have just purchased a new warehouse. To finance the purchase, you’ve arranged for a 25-year mortgage for 75 percent of the $3,600,000 purchase price. The monthly payment on this loan will be $17,700.
  
What is the APR on this loan?

Reiny · Accepted Answer

17700( 1 - (1+i)^-300)/i = 2700000
(1 - (1+i)^-300 )/i = 152.5423729

nasty.. going to use Wolfram

http://www.wolframalpha.com/input/?i=%281+-+%281%2Bx%29%5E-300+%29%2Fx+%3D+152.5423729

I = .0051528

annual rate compounded monthly = .0618..
or appr 6.18%